HMRC have started their annual campaign warning taxpayers not to ignore Simple Assessment letters. These are arriving with your clients now.
Simple Assessment is HMRC’s mechanism for collecting Income Tax due that is not / cannot be collected via PAYE. As HMRC’s 2026 campaign says, this may be for uncollected Income Tax due:
- On interest on savings or dividends;
- On a second income;
- On State Pension income; and / or
- Because it cannot be collected via a tax code (typically £3,000 or more)
Another reason could be that the taxpayer has received more personal allowances than they were due, for example because of the application of a Week 53 / 54 / 56 situation.
Simple Assessment letters for tax year 2025/26, known as the PA302 are arriving now and HMRC’s annual campaign warns taxpayers not to ignore these and to pay any Income Tax due by the deadline (31 January 2027).
For Bookkeepers
There are two ‘P letters’ that HMRC may send where there is an underpayment of Income Tax and the taxpayer is not in Self-Assessment:
- The PA302, above; or
- The P800 tax calculation letter, which may show that a refund is due
They are both to do with incorrect Income Tax calculations for a tax year and HMRC’s ‘Tax overpayments and underpayments’ guidance on Gov.UK explains the subtle difference. Importantly:
- If there is tax due, it must be paid; but
- If there is tax overpaid, shown on the P800, it must be claimed